How The Salvation Army Added Digital Payment Options to Its Red Kettle Campaign

A young captain told the San Francisco mayor he wanted to provide Christmas dinner for 1,000 people in need in 1891. The only problem? He didn’t have enough money to fund the meal, so he grabbed a large, red pot and solicited donations, Dale Bannon, national community relations and development director at The Salvation Army USA, said. 

About 130 years later, that same year-end red kettle campaign raises $100 million annually outside of popular retail stores. However, The Salvation Army began to notice a decline in that annual effort, so began testing the addition of digital options five years ago.

Bannon and his colleague, Andrew Dobney, the nonprofit’s director of digital strategy, shared the results on Wednesday at the Classy Collaborative in the session, “Modernizing Tradition: The Salvation Army’s Journey in Bringing the Red Kettle Fundraising Program Online,” moderated by Becca Sonnenklar, senior customer success manager at Classy.

Here’s how The Salvation Army has innovated its fundraising efforts, including adding digital payment options to its iconic year-end red kettle campaign.

Digital Payment Testing for the Red Kettle Campaign

As society moved more and more toward becoming cashless, The Salvation Army decided to test the use of digital payments to offset declines in cash donations in four markets in 2018. To do that, the organization added QR codes onto its red kettles that directed passers-by to a donation form. It calls this option, KettlePay.

“We spun up the simplest donation form we could think of,” Dobney said. “It had four buttons — $5, $10, $25 and ‘other.’ And then we had, at that time, Apple Pay, Google Pay and your credit cards, so you can checkout. We really wanted to emulate the experience of dropping in cash and coin, but make it very fast and [remove] barriers for our donors.”

The donations are then distributed to the donor’s local Salvation Army based on zip code. 

The organization saw success with its test, so began offering digital payment options nationwide the following year, adding a Near Field Communication (NFC) tag so donors could tap their phone to donate, as well as PayPal as a payment option. The digital donations grew year over year, but then the pandemic hit. Thanks to two years of testing, the nonprofit was already prepared for what was to come, including skepticism around touching cash and interacting with people.

“Luckily our partners were able to give us the go-ahead to stand outside of their stores to collect funds for programs we needed now more than ever,” Dobney said of the 2020 year-end red kettle campaign.

Digital Red Kettle Campaign Results

Despite the addition of digital payment options, cash is still king for the red kettle campaign, which raises about $100 million annually. 

“For the past four years [since] we’ve really rolled it out nationally, we’ve seen 33,000 transactions and roughly $500,000 raised [digitally], so definitely small potatoes in the grand scheme of our red kettles,” Dobney said.

Even though the nonprofit expected NFC tags to be the more innovative — and, therefore, the more lucrative — option, the pandemic brought QR codes into everyday use. Since the pandemic, QR codes have become the more popular of the two, with only 2% of donors utilizing the NFC tags. But opt-in among its territories has been significant despite some skepticism at first.

“If you find a kettle that does not have KettlePay on it, just send me a LinkedIn message or something like that,” Bannon said. “We’ve got some KettlePay police out there.”

Additionally, those who opt to pay digitally can be tracked and added to the organization’s donor databases (each of its four U.S. territories has a separate constituent relationship management system at the moment), whereas cash donors remain anonymous. That resulted in The Salvation Army learning that a surprising 85% of digital red kettle donors are new to its house file. Now the organization can cultivate those donors to give more frequently throughout the year.

“What this is showing is this cash and coin group audience that has supported The Salvation Army over hundreds of years may not be on our donor file … but now that we’ve offered some digital options [and] we are now able to understand … [those donors] are new folks to us potentially, how do we ensure we start a relationship off with them in the right way?” Dobney said.

What’s Next to Innovate?

The pandemic forced a lot of nonprofits to digitize their efforts quicker than they possibly would have otherwise. For The Salvation Army, that included online requests for services during the pandemic, real-time outcomes and statistics, and better overall services. Bannon believes the online applications are here to stay.

“We have case managers [at food programs to help the homeless] who the technology is really enabling them to serve everyone that we come in contact with in a much more holistic way,” Bannon said. “And so, I hope that we can keep pushing from a programmatic side all the technology and innovation that we need to serve everybody that comes to The Salvation Army with dignity and respect — and also a little more quickly.”

When it comes to data, The Salvation Army’s national organization is working on building a donor warehouse to combine its data in a single location to create a better picture of its donors across all efforts. 

“For someone who lives in Philadelphia, gives locally, wants to support our Ukraine effort, but also gave to the wildfires out West — in the past, those are four different people in our databases,” Bannon said. “We’re moving toward [where] we will recognize one donor through this donor warehouse project.”